How to Disable External Sharing in SharePoint Online?

Requirement: Disable external sharing in SharePoint Online using PowerShell

External sharing in SharePoint Online is a features enables users to share documents and content outside the organization with people who are not members of your organization such as vendors, customers, consultants, etc.

For security reasons, we wanted to disable external sharing completely.

How to Disable External Sharing in SharePoint Online?
To turn off external Sharing in SharePoint Online, follow these steps:

• Login to SharePoint Online Admin Center as a global admin or SharePoint Online admin.
• From the left navigation, click on "Sharing" link
• Under "Sharing outside your organization" section, set the sharing option to "Don't allow sharing outside your organization".
• Click on "OK" button in the bottom to save your changes.
  

This prevents all users on all sites from sharing sites or sharing content on sites with external users.

Disable External Sharing in SharePoint Online using PowerShell:

#Set Admin Center URL
$AdminCenterURL = "https://crescent-admin.sharepoint.com/"
 
#Connect to SharePoint Online
Connect-SPOService -url $AdminCenterURL -Credential (Get-Credential)
 
#Disable external sharing for the tenant
Set-SPOTenant -SharingCapability Disabled 

Disable External Sharing at Site Collection Level:
You can disable external sharing at each individual SharePoint Online site collection as well. To disable external sharing at site collection level using SharePoint Online admin center, follow these steps:

• Go to SharePoint Online Admin Center >> Select the desired Site collection from the list
• Click on "Sharing" button >> Set the sharing settings to "Only people in current organization". Click on "Save" to commit your changes.
  

Disable External Sharing in SharePoint Online Site Collection using PowerShell

#Set Admin Center URL
$AdminCenterURL = "https://crescent-admin.sharepoint.com/"
$SiteURL="https://crescent.sharepoint.com/sites/operations"

#Connect to SharePoint Online
Connect-SPOService -url $AdminCenterURL -Credential (Get-Credential)

#Disable external sharing
Set-SPOSite $SiteURL –SharingCapability "Disabled"

You can verify this in your SharePoint Online admin center as shown in the image above.

To get the list of sites where sharing capability is disabled:

Get-SPOSite | Where {$_. SharingCapability -eq "Disabled"}

To enable external sharing in SharePoint Online, refer: How to Enable External Sharing in SharePoint Online using PowerShell?